NERC Petition, without attachments

UNITED STATES OF AMERICA
BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION
North American Electric Reliability
Corporation

)
)

Docket No. _________

JOINT PETITION FOR APPROVAL OF
PROPOSED REGIONAL RELIABILITY STANDARDS
VAR-002-WECC-2 AND VAR-501-WECC-2

Gerald W. Cauley
President and Chief Executive Officer
North American Electric Reliability Corporation
3353 Peachtree Road, N.E.
Suite 600, North Tower
Atlanta, GA 30326
(404) 446-2560
(404) 446-2595 – facsimile
Charles A. Berardesco
Senior Vice President and General Counsel
Holly A. Hawkins
Associate General Counsel
Sean Bodkin
Associate Counsel
North American Electric Reliability Corporation
1325 G Street, N.W., Suite 600
Washington, D.C. 20005
(202) 400-3000
(202) 644-8099 – facsimile
[email protected]
[email protected]
[email protected]

Sandy Mooy
Associate General Counsel
Chris Albrecht
Legal Counsel
Western Electricity Coordinating Council
155 North 400 West, Suite 200
Salt Lake City, UT 84103
(801) 582-0353
[email protected]
[email protected]
Counsel for the Western Electricity Coordinating
Council

Counsel for the North American Electric
Reliability Corporation

December 15, 2014

TABLE OF CONTENTS
I.

Executive Summary ................................................................................................................ 2

II.

Notices and Communications ................................................................................................. 2

III.
A.

Regulatory Framework ..................................................................................................... 3

B.

History of VAR-002-WECC-2 and VAR-501-WECC-2 ................................................. 6

C.

Project 2013-02 Paragraph 81 .......................................................................................... 6

IV.

V.

Background .......................................................................................................................... 3

Justification for Approval .................................................................................................... 7

A.

Basis and Purpose of Proposed VAR-002-WECC-2 and VAR-501-WECC-2................ 8

B.

Enforceability of Proposed VAR-002-WECC-2 and VAR-501-WECC-2 ...................... 9
CONCLUSION ....................................................................................................................... 9

Exhibit A
Exhibit B

VAR-002-WECC-2 — Automatic Voltage Regulators
VAR-501-WECC-2 —Power System Stabilizers
Implementation Plan

Exhibit C

Order No. 672 Criteria

Exhibit D

Complete Development Record of Proposed VAR-002-WECC-2 and VAR-501WECC-2

Exhibit E

Standard Drafting Team Roster

ii

UNITED STATES OF AMERICA
BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION
North American Electric Reliability
Corporation

)
)

Docket No. _________

JOINT PETITION FOR APPROVAL OF
PROPOSED REGIONAL RELIABILITY STANDARDS
VAR-002-WECC-2 AND VAR-501-WECC-2

The North American Electric Reliability Corporation (“NERC”) 1 hereby requests Federal
Energy Regulatory Commission (“Commission”) approval, in accordance with Section 215(d)(1)
of the Federal Power Act (“FPA”) 2 and Section 39.5 of the Commission’s regulations, 3 of
proposed regional Reliability Standards VAR-002-WECC-2 (Automatic Voltage Regulators) and
VAR-501-WECC-2 (Power System Stabilizer) developed by NERC and the Western Electricity
Coordinating Council (“WECC”). 4 NERC requests that the Commission approve proposed
regional Reliability Standards VAR-002-WECC-2 and VAR-501-WECC-2 (Exhibit A) and find
that the proposed regional Reliability Standards are just, reasonable, not unduly discriminatory or
preferential, and in the public interest. 5 NERC also requests approval of the associated
Implementation Plan (Exhibit B). Proposed regional Reliability Standards VAR-002-WECC-2
and VAR-501-WECC-2 were adopted by the NERC Board of Trustees on November 13, 2014.

1

NERC has been certified by the Commission as the electric reliability organization (“ERO”) in accordance
with Section 215 of the FPA. See N. Am. Elec. Reliability Corp., 116 FERC ¶ 61,062 (2006).
2
16 U.S.C. § 824o (2012).
3
18 C.F.R. § 39.5 (2014).
4
As the Regional Entity who developed proposed regional Reliability Standards VAR-002-WECC-2 and
VAR-501-WECC-2, WECC joins and supports NERC’s petition, thereby making WECC a party in this proceeding.
5
Unless otherwise designated, capitalized terms shall have the meaning set forth in the Glossary of Terms
Used in NERC Reliability Standards (“NERC Glossary of Terms”), available at
http://www.nerc.com/files/Glossary_of_Terms.pdf.

1

As required by Section 39.5(a) 6 of the Commission’s regulations, this petition presents
the technical basis and purpose of the proposed Reliability Standards, a summary of the
development proceedings conducted by NERC and WECC for proposed VAR-002-WECC-2 and
VAR-501-WECC-2 (Exhibit D), and a demonstration that the proposed regional Reliability
Standards meet the criteria identified by the Commission in Order No. 672 7 (Exhibit C).
I.

Executive Summary
Consistent with the Commission’s order 8 approving NERC’s Compliance Enforcement

Initiative (“CEI”), including the Find, Fix, Track and Report (“FFT”) program, NERC is
requesting retirement of two requirements within two regional Reliability Standards, VAR-002WECC-1 Requirement R2 and VAR-501-WECC-1 Requirement R2, that are unnecessary, and
where violation of the requirements pose a lesser risk to the reliability of the Bulk-Power
System.
The proposed regional Reliability Standards continue to achieve the same reliability
purpose of the prior versions. The purpose of proposed VAR-002-WECC-2 is to ensure that
automatic voltage regulators on synchronous generators and condensers are kept in service and
controlling voltage. The purpose of proposed VAR-501-WECC-2 is to ensure that power system
stabilizers on synchronous generators are kept in service.
II.

Notices and Communications

6

18 C.F.R. § 39.5(a) (2012).
The Commission specified in Order No. 672 certain general factors it would consider when assessing
whether a particular Reliability Standard is just and reasonable. See Rules Concerning Certification of the Electric
Reliability Organization; and Procedures for the Establishment, Approval, and Enforcement of Electric Reliability
Standards, Order No. 672, FERC Stats. & Regs. ¶ 31,204, at P 262, 321-37, order on reh’g, Order No. 672-A,
FERC Stats. & Regs. ¶ 31,212 (2006).
8
North American Electric Reliability Corporation, 138 FERC ¶ 61,193 at P 81 (2012) (“FFT Order”).
7

2

Notices and communications with respect to this filing may be addressed to the
following: 9
Gerald W. Cauley
President and Chief Executive Officer
North American Electric Reliability Corporation
3353 Peachtree Road, N.E.
Suite 600, North Tower
Atlanta, GA 30326
(404) 446-2560
(404) 446-2595 – facsimile
Sandy Mooy*
Associate General Counsel
Chris Albrecht*
Legal Counsel
Western Electricity Coordinating Council
155 North 400 West, Suite 200
Salt Lake City, UT 84103
(801) 582-0353
[email protected]
[email protected]
III.

Charles A. Berardesco*
Senior Vice President and General Counsel
Holly A. Hawkins*
Associate General Counsel
Sean Bodkin*
Associate Counsel
North American Electric Reliability
Corporation
1325 G Street, N.W., Suite 600
Washington, D.C. 20005
(202) 400-3000
(202) 644-8099 – facsimile
[email protected]
[email protected]
[email protected]

Background
A.

Regulatory Framework

By enacting the Energy Policy Act of 2005, which amended the Federal Power Act
(“FPA”), 10 Congress entrusted the Commission with the duties of approving and enforcing rules
to ensure the reliability of the Nation’s Bulk-Power System, and with the duties of certifying an
ERO that would be charged with developing and enforcing mandatory Reliability Standards,
subject to Commission approval. Section 215(b)(1) 11 of the FPA states that all users, owners,
and operators of the Bulk-Power System in the United States will be subject to Commission-

9

Persons to be included on the Commission’s service list are identified by an asterisk. NERC respectfully
requests a waiver of Rule 203 of the Commission’s regulations, 18 C.F.R. § 385.203 (2014), to allow the inclusion
of more than two persons on the service list in this proceeding.
10
16 U.S.C. § 824o (2012).
11
Id. § 824(b)(1).

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approved Reliability Standards. Section 215(d)(5) 12 of the FPA authorizes the Commission to
order the ERO to submit a new or modified Reliability Standard. Section 39.5(a) 13 of the
Commission’s regulations requires the ERO to file with the Commission for its approval each
Reliability Standard that the ERO proposes should become mandatory and enforceable in the
United States, and each modification to a Reliability Standard that the ERO proposes should be
made effective.
The Commission has the regulatory responsibility to approve standards that protect the
reliability of the Bulk-Power System and to ensure that such standards are just, reasonable, not
unduly discriminatory or preferential, and in the public interest. A Reliability Standard proposed
by a Regional Entity must meet the same standard that NERC’s Reliability Standards must meet,
i.e., the regional Reliability Standard must be shown to be just, reasonable, not unduly
discriminatory or preferential, and in the public interest. 14 If the regional Reliability Standard is
proposed by a Regional Entity organized on an Interconnection-wide basis, to be applicable on
an Interconnection-wide basis, then NERC must rebuttably presume that the standard is just,
reasonable, not unduly discriminatory or preferential, and in the public interest. 15
Pursuant to Section 215(d)(2) of the FPA 16 and Section 39.5(c)(1)-(2) 17 of the
Commission’s regulations, the Commission will give due weight to the technical expertise of the
ERO with respect to the content of a Reliability Standard and to the technical expertise of a
Regional Entity organized on an Interconnection-wide basis with respect to a Reliability

12
13
14
15
16
17

Id. § 824o(d)(5).
18 C.F.R. § 39.5(a) (2014).
16 U.S.C. § 824o(d)(2); 18 C.F.R. §39.5(a).
16 U.S.C. § 824o(d)(3); 18 C.F.R. §39.5(b).
16 U.S.C. § 824o(d)(2).
18 C.F.R. § 39.5(c)(1)(2).

4

Standard to be applicable within that Interconnection. In Order No. 672, the Commission noted
that:
As a general matter, we will accept the following two types of
regional differences, provided they are otherwise just, reasonable,
not unduly discriminatory or preferential and in the public interest,
as required under the statute: (1) a regional difference that is more
stringent than the continent-wide Reliability Standard, including a
regional difference that addresses matters that the continent-wide
Reliability Standard does not; and (2) a regional Reliability
Standard that is necessitated by a physical difference in the BulkPower System. 18
A regional difference generally takes one of two forms: (1) a regional variance may be
included in a continent-wide Reliability Standard, which achieves the reliability objective of the
continent-wide standard’s requirement(s) in an alternate way than specified in a given
Requirement in the continent-wide standard or (2) a separate regional Reliability Standard may
be developed, which adds one or more Requirements without altering any continent-wide
Requirements that are applicable to entities in the region. 19 As discussed in the Western
Electricity Coordinating Council Reliability Standards Development Procedures, the regional
Reliability Standards for WECC are developed in a transparent, inclusive, open, and balanced
process with reasonable notice and opportunity for public comment. 20

18

Order No. 672 at P 291.
See NERC, Whitepaper to Provide Guidance on Regional Standards and Variances, May 17, 2012, available at
http://www.nerc.com/docs/sac/rsg/Whitepaper%20on%20Regional%20Standards%20and%20Variances%20final.pd
f.
20
The Western Electricity Coordinating Council Reliability Standards Development Procedures are available at
https://www.wecc.biz/_layouts/15/WopiFrame.aspx?sourcedoc=/Reliability/WECC%20Reliability%20Standards%20
Development%20Procedures.pdf&action=default&DefaultItemOpen=1
19

5

B.

History of VAR-002-WECC-2 and VAR-501-WECC-2

On March 16, 2007, the Commission issued Order No. 693, approving Reliability
Standard VAR-002-1. 21 Reliability Standard VAR-002-1 requires Generator Operators to
operate in automatic voltage control mode, to maintain generator voltage or reactive power
output as directed by the Transmission Operator, and to notify the Transmission Operator of a
change in status or capability of any generator reactive power resource.
On June 8, 2007, the Commission approved eight WECC regional Reliability Standards
that apply in the Western Interconnection, including WECC-VAR-STD-002a-1 (Automatic
Voltage Regulators) and WECC-VAR-STD-002b-1 (Power System Stabilizer). 22 The
Commission subsequently approved revisions to both WECC-VAR-STD-002a-1 and WECCVAR-STD-002b-1, which were re-designated VAR-002-WECC-1 and VAR-501-WECC-1
respectively, in Order No. 751. 23
C.

Project 2013-02 Paragraph 81

On March 15, 2012, the Commission issued an order 24 approving NERC’s CEI, including
the FFT program. Paragraph 81 (“P 81”) of the FFT Order reads:
The Commission notes that NERC’s FFT initiative is predicated on
the view that many violations of requirements currently included in
Reliability Standards pose lesser risk to the Bulk-Power System. If
so, some current requirements likely provide little protection for
Bulk-Power System reliability or may be redundant. The
Commission is interested in obtaining views on whether such
requirements could be removed from the Reliability Standards with
little effect on reliability and an increase in efficiency of the ERO
compliance program. If NERC believes that specific Reliability
Standards or specific requirements within certain Standards should
be revised or removed, we invite NERC to make specific proposals
21

Id. P 1884.
N. Am. Elec.Reliability Corp., 119 FERC ¶ 61,260 (2007).
23
Version One Regional Reliability Standards for Facilities Design, Connections, and Maintenance;
Protection and Control; and Voltage and Reactive, 135 FERC ¶ 61,061 (2011).
24
FFT Order at P 81 (emphasis added).
22

6

to the Commission identifying the Standards or requirements and
setting forth in detail the technical basis for its belief. In addition,
or in the alternative, we invite NERC, the Regional Entities and
other interested entities to propose appropriate mechanisms to
identify and remove from the Commission approved Reliability
Standards unnecessary or redundant requirements. We will not
impose a deadline on when these comments should be submitted,
but ask that to the extent such comments are submitted NERC, the
Regional Entities, and interested entities coordinate to submit their
respective comments concurrently.
In response, NERC initiated a review, referred to as the “P 81 project,” to identify
requirements that could be removed from Reliability Standards without impacting the reliability
of the Bulk-Power System. This project identified Requirement R2 in both regional Reliability
Standards VAR-002-WECC-1 and VAR-005-WECC-1 as candidates for retirement. However,
because these Reliability Standards are maintained by WECC, the retirements were deferred in
that project for later consideration by WECC through its standard development process. 25
IV.

Justification for Approval
This section explains the proposed Requirement R2 retirement in each proposed regional

Reliability Standard and how each continues to meet its respective reliability purpose. NERC
and WECC request Commission approval of proposed regional Reliability Standards VAR-002WECC-2 and VAR-501-WECC-2 (Exhibit A) and the Implementation Plan (Exhibit B). As
discussed in Exhibit C, proposed regional Reliability Standards VAR-002-WECC-2 and VAR501-WCC-2 satisfy the Commission’s criteria in Order No. 672 and are just, reasonable, not
unduly discriminatory or preferential, and in the public interest. The complete development
record for the proposed Regional Reliability Standard is provided in Exhibit D.

25

See “Complete Set of Standards with Proposed Retirements for Phase 1” available on the P 81 project page
at http://www.nerc.com/pa/Stand/Pages/Project2013-02_Paragraph_81.aspx.

7

A.

Basis and Purpose of Proposed VAR-002-WECC-2 and VAR-501-WECC-2

Proposed VAR-002-WECC-2 and proposed VAR-501-WECC-2 revise currentlyeffective version 1 standards to remove an administrative Requirement R2 in each, which require
documentation of R1. The documentation language has been added to the Measure in
Requirement R1 in each. VAR-002-WECC-1, Requirement R2 states:
R2. Generator Operators and Transmission Operators shall have
documentation identifying the number of hours excluded for each
requirement in R1.1 through R1.10. [Violation Risk Factor: Low]
[Time Horizon: Operations Assessment]
VAR-501-WECC-2, Requirement R2 states:
R2. Generator Operators shall have documentation identifying the
number of hours excluded for each requirement in R1.1 through
R1.12. [Violation Risk Factor: Low] [Time Horizon: Operations
Assessment]
The proposed modifications in both VAR-002-WECC-1 and VAR-501-WECC-2 include:
•

deletion of Requirement R2, which requires documentation of Requirement R1;

•

the addition of Measure M1.4.3 requiring the date of the outage be provided with the
currently required quarterly reports; and

•

non-substantive formatting changes have been made throughout the document to conform
to NERC drafting conventions.
The substantive Requirements in both regional Reliability Standards have not changed

and remain more stringent than the continent-wide Reliability Standard VAR-002-1. Proposed
VAR-002-WECC-2 continues to set only very limited circumstances for when a generator’s
automatic voltage regulator should be operated in a mode other than voltage control mode and
continues to further limit the cumulative timeframe for doing so. Proposed VAR-501-WECC-2
continues to require that Generator Operators have a power system stabilizer in service.

8

B.

Enforceability of Proposed VAR-002-WECC-2 and VAR-501-WECC-2

Proposed VAR-002-WECC-2 and VAR-501-WECC-2 contain Measures that support
each Requirement by clearly identifying what is required and how the Requirement will be
enforced. The Measures have not substantively changed from the prior Commission approved
versions of the Standards except for the addition of reporting the date of an outage related to an
exclusion for each Standard. The Measures continue to provide clarity regarding how the
Requirements will be enforced, and ensure that the Requirements will be enforced in a clear,
consistent, and non-preferential manner and without prejudice to any party. 26 The proposed
regional Reliability Standards continue to contain both a VRF and VSL for the remaining
Requirement R1.
V.

CONCLUSION
For the reasons stated above, NERC and WECC respectfully request that the Commission

approve the proposed VAR-002-WECC-2 and VAR-501-WECC-2 regional Reliability Standards
and the Implementation Plan.

Respectfully submitted,
/s/ Sean Bodkin
Charles A. Berardesco
Senior Vice President and General Counsel
Holly A. Hawkins
Associate General Counsel
Sean Bodkin
North American Electric Reliability
Corporation

26

Order No. 672 at P 327 (“There should be a clear criterion or measure of whether an entity is in compliance
with a proposed Reliability Standard. It should contain or be accompanied by an objective measure of compliance
so that it can be enforced and so that enforcement can be applied in a consistent and non-preferential manner.”).

9

1325 G Street, N.W., Suite 600
Washington, D.C. 20005
(202) 400-3000
(202) 644-8099 – facsimile
[email protected]
[email protected]
[email protected]
Counsel for the North American Electric
Reliability Corporation
December 15, 2014

10